Our interview with H.E. Ms. Gaitri Ambassador of India to the Belgium, Luxembourg and the EU on India-EU economic, political and cultural relations

In October 2017, the 14th India-EU Summit was unable to set in motion the stalled negotiations for concluding the proposed Free Trade Agreement (FTA), or Broad Based Trade and Investment agreement (BTIA). According to you, what are the main obstacles to the conclusion of an agreement?

Trade has been an integral part of the EU India relationship. As you are aware, the EU is India’s largest trading partner and India-EU, bilateral trade in goods and services currently is worth 105 billion euros.

India-EU BTIA

With an objective to diversify and boost bilateral trade, both India and the EU have been negotiating a Bilateral Trade and Investment Agreement since 2007. There had not been sufficient progress due to divergent ambitions on both sides.

During the 14th India EU Summit held in October last year in New Delhi, “The Leaders expressed their shared commitment to strengthening the Economic Partnership between India and the EU and noted the ongoing efforts of both sides to re-engage actively towards timely re-launching negotiations for a comprehensive and mutually beneficial India-EU Broad Based Trade and Investment Agreement (BTIA).”

India is committed to early resumption and conclusion of agreement.

It recently was the International Women’s Day – an occasion to rethink today’s role of women and the current general perception of women in leading positions. What advice would you give to young women willing to enter politics/start their own business?

Women, particularly young women, should be actively encouraged to enter politics. Through robust mechanisms of education, we must try to instill political consciousness and awareness amongst the youth. This will enable them to participate as equal partners in the political sphere. A fair representation of women in the legislature and executive will help in drafting regulations that remove existing gender bias and promote new policies that empower women. Similarly, we should also encourage entrepreneurship amongst women by providing seed funding at subsidized rates – when more women become entrepreneurs, the business world will be forced to re-orient itself in a more sustainable, ethical and moral direction.

During a meeting with the former UK Prime Minister David Cameron in November 2015, the Prime Minister Narendra Modi explained that “As far as India is concerned, if there is an entry point for us to the EU, that is the UK. “India is one of the top investors in the UK and several Indian firms have significant interests in the UK. How will Brexit affect the Indian economy?

India would be the world’s fifth largest economy overtaking the UK and France by this year end, both EU27 and the UK would look at India as the fastest growing major emerging economy and try to resolve the pending trade issues. If the UK succeeds an FTA with the EU27, the Indian companies that would set up in the UK could sell their products to the rest of the EU.

The impact on India’s exports can happen in two ways: (1) decline in demand for India’s goods and services because of Brexit-induced growth slowdown in the UK and EU, and (2) unfavorable/erratic exchange rate movements.

Brexit will have direct and indirect impact on growth prospects of both the UK and the EU. As per IMF projections, Brexit will wipe up anything between 1% and 9% of the UK’s GDP growth rate, depending upon actual terms of its withdrawal from the EU. If Britain fails to retain duty-free market access in the EU, rise in EU tariff and non-tariff trade barriers will disrupt existing supply chains. That, along with slowing GDP growth, will reduce the demand for India’s exports to the region. This depends upon the negotiation being carried out between the EU27 and the UK.

India has its vast diaspora spread across nearly every continent. Moreover India’s geostrategic location, its relatively sound economic position vis-à-vis its neighbours (Tibet, Afghanistan, Sri Lanka, Myanmar, Pakistan, and Bangladesh) and its liberal democratic credentials have long made it a magnet for people in other parts of the region who are fleeing persecution in their countries of origin or looking for a better life. How does India cope with those important migratory flows? What is the policy concerning illegal migrants?

India has not enacted any laws or regulations relating to the status of asylum seekers and refugees. Instead, those persons are governed by the general Foreigners Act of 1946. Indian law required every person entering the country to have proper documentation denoting permission from Indian authorities. Without such permission, a person is at the risk of deportation as an illegal entrant. Standard Operating Procedures are issued by Ministry of Home Affairs to deal with foreign nationals in India, who claim to be refugees. Indian Citizenship is granted under the provisions of Citizenship Act, 1955 and there is no separate provision to grant Indian Citizenship to any refugees. Long Term Visas are granted to such foreigners based on existing guidelines after due security verification etc. which enable them to take employment in the private sector, undertake studies in any academic institution etc. Only specific refugee groups such as Tibetans and Sri Lankan Tamils are recognized and supported directly by Government of India. Other refugees have to obtain a ‘refugee status determination’ directly from office of the United Nations High Commissioner for Refugees (UNHCR), New Delhi, which assesses whether they qualify for getting a refugee status.

How do you assess India’s cultural influence in the European Union?

India’s unique relationship with Europe is moored in history. One cannot think of India’s historical links with Europe, without thinking of the flavours and fragrance of the robust spice trade that existed between our lands. The Age of Discovery dawned over Europe in the wake of the discovery of the spice route to India. Our historical contact with each other had a transformative impact on our economic, cultural, artistic, linguistic, and scientific traditions. Our civilizations have enriched one another as a result. In the late 16th century, baroque architecture from Portugal crossed the seas to reach the Basilicas on the shores of Goa. Similarly, Kalidasa’s Shakuntala travelled thousands of miles to revive Romanticism in 19th century Europe. This story of rich cultural exchanges traces the evolution of the India’s enduring ties with Europe. There are several ways in which India’s cultural heritage is making an impact in Europe. The popularity of Yoga in Europe perhaps provides one of the most profound examples of India’s soft power today.

What are the main sectors and countries of activity of Indian entrepreneurs in Europe?

The main EU countries in the lead for Indian entrepreneurs are the United Kingdom, Germany, Netherlands, France and Belgium. For the entrepreneurs main sectors of interest are: Textiles, engineering goods, pharmaceuticals, IT and ITES, precious stones. Indian entrepreneurs see capital and value-based manufacturing as the next big opportunity.

(Regarding investments by Indian companies in the EU, twenty per cent of Indian investments are in the IT/ITES space (IT services, software product development, back office), followed by other major sectors such as Automotive, Manufacturing and Steel)

What are the main challenges faced by Indian companies in Europe and what would you suggest the EU and the local governments could do to facilitate the market access to Indian migrant entrepreneurs and to help their business grow?

Visa and work permit regulations are the main challenges faced by Indian companies. The European Commission could consider creating Special Economic Zones (SEZ) like a ‘European Silicon valley’. This will attract Indian entrepreneurs with novel ideas and the advantages of lower taxes, less red tape and other favourable investment conditions will also attract overseas investors.

As a woman and high end diplomat, what are your suggestions on how to best tackle/narrow the pay gap and to improve women representation in leading positions? Are you in favour of quotas?

Gender equality is not just about economic empowerment. It is a moral imperative. It is about fairness and equity and includes many political, social and cultural dimensions. Greater educational equality does not guarantee equality in the workplace. The issues are complex and tackling them successfully means changing the way our societies and economies function. Men and women have to be able to find a work-life balance that suits them, regardless of family status or household income. Sharing childcare responsibilities can be difficult in a culture where men are considered professionally uncommitted if they take advantage of parental leave and mothers are sidetracked from career paths. And if good quality, affordable childcare is unavailable, it may simply be impossible for many parents, especially those on low incomes, to work full-time and take care of their families. Increased gender equality has at least as many, if not more, benefits to offer developing countries, where women’s economic empowerment is a prerequisite for sustainable development, pro-poor growth, and the achievement of all the Millennium Development Goals (MDGs).

Female employment participation has generally increased and gender gaps in labour force participation have narrowed. Yet occupational segregation has not improved, gender pay gaps persist, and women are still under-represented at more senior job levels, especially among managers and on company boards.

Women often work part-time as it facilitates combining work and family responsibilities, but this frequently comes at a cost to their long-term career and earning prospects.

Strengthen the capacity of governments to apply a gender-responsive approach throughout the public financial management cycle and enhance gender impact assessments.

Reform legal frameworks and ensure their enforcement to remove any obstacles to gender equality; prohibit discrimination, combat all forms of pay discrimination; uphold the notion of equal pay for work of equal value; and, provide economic support and incentives for individuals, families and communities to change discriminatory attitudes.

Countries should set realistic targets for women in senior management positions in the public service.

Address cultural barriers and the stereotyping of women’s roles in society, business and the public sector.

Countries should introduce targets and measures to monitor progress on female representation on the boards of listed companies

(In Belgium, the battle against gender inequality is fought using the controversial instrument of quotas, in politics, business and beyond).

In the political world, quotas ensure that parliament truly reflects the population it represents. When a parliament consists only or mainly of men, it becomes very hard to gain broad support for political decisions, and to demonstrate that every citizen can be elected.)

It is unacceptable that political leadership is still very much a predominantly male privilege. According to Phumzile Mlambo- Ngcuka, Executive Director of UN Women, it will take another 50 years to achieve gender equality in the political sphere at the current rate of change. Patiently waiting for that to happen is not an option. Tough measures are needed, and quotas for women in parliamentary meetings is the most important one.

Gender equality is not just a problem that affects politics, but concerns the business world, too. Research has shown time and again that the more female managers a company has, the more profitable it is. Economy and society have every interest in tapping all the talent in their midst.

Quotas in the business world can put an end to the “old boys” networks and ensure that qualified women are no longer denied access to management positions because of their gender. The quotas are by definition temporary measures, aimed at eradicating an inequality that has built up over time. Once that is done, the quotas will be lifted in accordance with the principle of equal treatment as it is interpreted by international courts of human rights.

What are the main reasons for the low percentage of women entrepreneurship? What would you suggest could be done in order to promote woman entrepreneurship?

In India: No more than 14% of business establishments in India are run by female entrepreneurs, according to the Sixth Economic Census by the National Sample Survey Organisation (NSSO). There are 58.5 million businesses in India, of which 8.05 million are managed by women, employing over 13.48 million people. These enterprises range from corner shops to venture-funded startups.

In India, women are considered to be as equal parameters in development but due to exploitation and subjugation, Indian women have remained at receiving end. Women in India have been neglected a lot; they are not involved in the mainstream of development even though they represent a proportion of Indian population and labor force.

Women are also less likely than men to borrow money to finance their business. There are several reasons. Women might be charged higher interest rates and asked for more guarantees, as they often have shorter credit histories, less operating capacity, and less collateral. It may also be that women do not apply because they are afraid of refusal or lack confidence in the growth potential of their business.

Some suggestions to promote woman entrepreneurship

Give proper technical education to the women and opening of women development cells

Improvement of identification mechanism of new enterprise

Assistance in project formulation and follow up of training programmes

Information on credit facilities, financial incentive and subsidies

Adequate follow-up and support to the women enterprises

Proper documentation on women Enterprises research and application from time to time.

In the EU itself, regarding the current situation of female entrepreneurs, the EC has mentioned the following:

Women constitute 52% of the total Europeanpopulation but only 4% of the EU self-employed and 30% of start-up entrepreneurs

female creativity and entrepreneurial potential are an under-exploited source of economic growth and jobs that should be further developed.